Mr Noonan confirmed that the Government has drawn up a paper assessing the potential effects of a ‘Brexit’ - but insisted it is not a “contingency plan” per se.

He made the announcement as Taoiseach Enda Kenny today attends a crucial summit in Brussels to discuss the prospect of Britain leaving the EU.

Prime Minister David Cameron is hoping to secure agreement on a series of key issues which he can then put to British voters by way of a referendum, which is expected to be held in June.

Mr Kenny convened a meeting of Cabinet, which lasted approximately an hour, before flying to Brussels for the summit, which is expected to run late into the night. The Cabinet agreed to formally support the demands of the UK Government.

Following the Cabinet meeting, Mr Noonan and Public Expenditure Minister Brendan Howlin said the Government is firmly in favour of Britain remaining a member.

"We have, of course, selfish interests. We have vested interests. We think a British departure would add to instability at this point. We think that to ensure the continuing recovery of the Irish economy we need stability, and particularly stability on our doorstep with our neighbours,” Mr Noonan told reporters.

The Fine Gael politician also voiced concerns surrounding the impact a ‘Brexit’ could have on Northern Ireland.

“Obviously we would like a situation where, from an economic and social point of view, the island is one unit. Anything that would reinforce the border militates against that,” Mr Noonan said.

“Effectively if you drive from Dublin to Belfast now, you are not conscious of the border because as an international barrier the border has more or less disappeared. We want to keep it like that. And anything that would restrict, migration, movement of people, trade, anything like that - just a couple of miles North DUblin - we wouldn’t support that in any way and we would move to avoid that under any circumstance.”